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Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 22, 2026. REUTERS/Brendan McDermid TPX IMAGES OF THE DAY Purchase Licensing Rights, opens new tab
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Summary
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Companies
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Indexes down: Dow 0.09%, S&P 1.44%, Nasdaq 2.21%
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Philadelphia SE Semiconductor index falls 7.9%
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CBOE Volatility Index at an over-one-week high
June 23 (Reuters) - The Nasdaq and the S&P 500 closed at more than one-week lows on Tuesday, dragged down by sharp losses in semiconductor stocks as investors scrutinized growing debt-funded AI spending and braced for a more hawkish U.S. Federal Reserve.
The Dow ended slightly lower.
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The Philadelphia SE Semiconductor index (.SOX), opens new tab tumbled 7.9% and the S&P 500 information technology sector index (.SPLRCT), opens new tab slipped 3.7%.
Nvidia (NVDA.O), opens new tab dropped 4.1% and Alphabet (GOOGL.O), opens new tab fell 1% while chipmakers Intel (INTC.O), opens new tab, Marvell Technology (MRVL.O), opens new tab and Advanced Micro Devices (AMD.O), opens new tab lost between 5.8% and 9.4%.
“Some of the news lately about AI raises questions about all the spending that’s being done and the capex and ramping of the capacity for semiconductors," said Thomas Martin, senior portfolio manager at Globalt.
Concerns over hyperscalers' debt-funded AI spending have contributed to the selloff. Elon Musk's SpaceX (SPCX.O), opens new tab, which debuted this month, has joined a list of megacaps tapping the bond market to raise capital.
Shares of SpaceX rose 1%, following losses in the last three sessions.
Memory chipmakers Micron Technology (MU.O), opens new tab and SanDisk (SNDK.O), opens new tab, among the best performers on the S&P 500 this year, both fell around 13%.
Micron's earnings on Wednesday could offer clues on the outlook for the memory and AI chip sector after a searing rally this year.
The Dow Jones Industrial Average (.DJI), opens new tab fell 47.22 points, or 0.09%, to 51,665.49, the S&P 500 (.SPX), opens new tab lost 107.32 points, or 1.44%, to 7,365.47 and the Nasdaq Composite (.IXIC), opens new tab lost 579.56 points, or 2.21%, to 25,587.04.
The CBOE Volatility Index (.VIX), opens new tab, Wall Street's fear gauge, hit an over-one-week high, climbing 2.23 points to 19.52.
Six of the 11 major S&P 500 sectors moved higher, with consumer staples (.SPLRCS), opens new tab rising the most at 1.8%. With highly priced tech shares coming under pressure recently, investors have shifted focus to other areas of the market.
Traders are increasingly betting on a second interest rate hike by the Fed by December, according to LSEG data, compared to expectations of just one 25-basis-point hike two weeks ago, as investors price in hawkish monetary policy under new Chair Kevin Warsh.
Personal Consumption Expenditures Price Index data, the Fed's preferred inflation gauge, is expected on Thursday.
Investors are also watching developments in the Middle East. The U.S. Senate backed legislation on Tuesday to halt U.S. military action against Iran, but it was unclear how it would affect the war as President Donald Trump's administration negotiates a peace agreement with Iran.
Declining issues outnumbered advancers by a 1.31-to-1 ratio on the NYSE. There were 120 new highs and 187 new lows on the NYSE. On the Nasdaq, 2,181 stocks rose and 2,636 fell as declining issues outnumbered advancers by a 1.21-to-1 ratio.
The S&P 500 posted 12 new 52-week highs and five new lows while the Nasdaq Composite recorded 132 new highs and 182 new lows.
Volume on U.S. exchanges was 24.1 billion shares, compared with the 22.53 billion average for the full session over the last 20 trading days.
Reporting by Abigail Summerville in New York and Twesha Dikshit and Joel Jose in Bengaluru; Editing by Rod Nickel
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Thomson Reuters
Abigail is on the M&A team and writes about consumer and retail deals. She joined Reuters in 2022 from Debtwire where she covered leveraged finance and the primary debt market for three years. Previously, her work has appeared in the Wall Street Journal, CNBC and the Boston Business Journal. She majored in business journalism at Washington and Lee University.
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